Bathurst seeks more cash

Operations at Bathurst's Cascade mine, next to the Denniston plateau above Westport, which supplies coal for domestic use. Photo from ODT files.
Operations at Bathurst's Cascade mine, next to the Denniston plateau above Westport, which supplies coal for domestic use. Photo from ODT files.
West Coast coking coal mine developer Bathurst Resources is seeking more cash while it waits out record low global coal prices.

Having raised $A7.39 million ($NZ8.03 million) from institutional investors last month, it is now seeking up to $2.7 million in a 1:23 share rights issue to shareholders.

After two years fighting environmental groups over consents to mine the Denniston plateau above Westport, the global coal price plunged to a nine-year low below $US100 per tonne, making mining uneconomic.

Bathurst has spent about $300 million in acquisitions, mine planning and development, consenting and legal challenges, but had to lay off staff and cut management salaries to wait out the slump.

The shares are offered at 6.5c, closing on July 3.

From a year-high in October of 25c per share, they have since plunged, trading below 7c per share since mid-April; yesterday at 6.5c. The all time high was $1.74 in April 2011.

The company said in a statement ''Bathurst intends to use the proceeds from this offer, along with the raising from the recent placement, primarily to fund the development of the Escarpment Project, and to assess other sites on the West Coast of New Zealand for their potential''.

Aside from raising $18.9 million in September from institutional investors, as at March, Bathurst had about $10 million in cash and short term deposits.

Cash flow is coming from three small existing South Island mines purchased by Bathurst, which are expected to increase their 400,000-tonne production this year. That production is sold domestically.

-simon.hartley@odt.co.nz

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